One of the pitfalls about being a realtor and blogging about this business is the fear of getting into trouble by badmouthing somebody’s property or project. I really have tried hard not to do that…and sometimes that hasn’t been easy! At the outset here I want to sincerely say that I think Foster City has the best condo/townhouse projects on the Peninsula. They’re well designed, have great amenities and they’re in a town that has substance.
Here’s the problem, I’ve been concerned for a long time about the impact some of these projects association dues would have on their values. I’m really concerned what will happen when some of these projects begin to incorporate flood insurance into their monthly HOA dues. For the uninitiated, Foster City has projects like Winston Square that has dues of $175.00 a month. Treasure Isle at $255.00 a month, Shell Cove at $299.00 a month and Marina Green at $340.00 a month. There’s a bunch of others in this same category and they’re pretty normal if you ask me.
Then you have Bayfront Court at $435.00, Nantucket Cove at $488.00 and Marina Point at $483.00. You also have Meridian Bay at $546.00, The Islands at $603.00 and Promontory Point at $772.00. In 2005 a unit at Promontory Point sold for $1,551,400. No fewer than 16 units sold for more than $1,049,000 in those years. The most money spent at Promontory Point since 2007 was $880,000 in January of 2009. There’s a unit on the market there right now for $749,947. I can’t think of a project, community or neighborhood in the Mid Peninsula that’s taken the type of pounding that Promontory Point has taken when it comes to value erosion. Call me zany…but do you suppose those dues have had a negative impact?
How does that translate in the real world? At 4.75% interest $772.00 a month is the equivalent of $148,000 on a mortgage. It’s $116,000 for the Islands and their $603.00 a month dues. I’ve had many, many clients reject these projects when they found out about these dues. I think it’s understandable.
Again, the question is…what happens when they have to absorb mandatory flood insurance? How much will they go up? I know there are really great people living at these projects and I’m sure there are significant reasons for these dues being this high…it’s just a fact that they’re having a large impact on the project’s overall value.
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